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MINNEAPOLIS — Many financial institutions are turning to sweep repurchase agreements and money market mutual fund sweep agreements to better serve business deposit account customers, according to Art Doten, an attorney with Wolters Kluwer Financial Services.

Under a typical sweep repurchase agreement, a bank and a checking account owner agree that excess funds will be swept out of the checking account at the end of each day in payment for government securities sold by the bank to the checking account owner, Doten wrote in a June 2008 Wolters Kluwer compliance brief. Funds will also be swept back into the checking account at the end of the next business day by the bank repurchasing the government securities from the checking account owner at a price consisting of the original sale price plus interest at an agreed rate.

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